Averages are turning lower, especially the 9 day which is leaking down to 52.53. Momentum is not setting any new lows, and this is about the only supportive factor in the chart analysis right now.
Chinese domestic prices have taken a hit over the last week, remaining weak in both spot cash prices, the CNCE and the ZCE exchange prices. Added weakness has been infused by the recent drop in NY futures prices.
Most domestic price weakness has come from the pending import quota release, which all said will provision for 610,000 MT of imports to be made, on a provision that they are purchased in conjunction with Xinjiang cotton on a 1:1 basis.
The price gap between landed CIF cotton and Chinese domestic cotton is still over 3.00 cents per pound even after accounting for the cost of the quota and the import tariff.
The Chinese Cotton Association this week announced a revised Chinese production estimate of 6.346 million tons, which is dramatically above early estimates and especially USDA estimates, which are currently still at 6.1million tons.
Weekend weather calls for dry and warm conditions throughout the weekend, as well as early into next week. In the East especially, it looks as though any early overly wet conditions are now well and truly behind the crop.
marketing@alchempro.com
